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CSE scam: Ketan Parekh arrested, to be taken to Kolkata

Priya Ganapati in Mumbai

Tainted stockbroker Ketan Parekh has been arrested in Mumbai in connection with the Calcutta Stock Exchange payment crisis that occurred in March last year.

Kolkata police arrived in Mumbai on Monday morning and arrested Parekh at 1600 IST. Parekh will be taken to Kolkata to be produced before the courts there in connection with the cases that were filed against him after the stock meltdown.

In April 2001, the Calcutta Stock Exchange was engulfed in one of the country's worst-ever payment shortfall crises. Ten defaulting brokers or broking firms belonging to three major players failed to pay up Rs106.93 crores (Rs 1.07 billion) to the exchange against their obligations in three consecutive weekly settlements (numbers 148, 149 and 150).

The crisis depleted Rs 48 crores (Rs 480 million) out of CSE's Settlement Guarantee Fund and Rs 20 crores (Rs 200 million) from the general reserves. Parekh was blamed for it as it was widely suspected that he had used some CSE brokers as his front for deals in the information, communication and entertainment shares.

A senior broket at that time had said, the "exchnage was rocked by the crisis because it is the weakest part of the chain that is responsible for the capital market meltdown."

On November 29, absconding stockbroker Ashok Kumar Poddar, wanted in connection with the Rs 120 crore (Rs 1.2 billion) CSE scam was arrested.

Poddar was last of the three prime accused to have been arrested in the scam. Investigations were initiated following a first information report filed by CSE in September.

The other two prime accused Harish Chander Biyani and Dinesh Kumar Singhania, former president of CSE, were arrested on September 23 and November 20 respectively.

With Parekh's detention, the total number of arrests in the case has gone up to 18 and include former CEO and MD of Stock Holding Corporation of India B V Gaud, a senior vice-president of IndusInd Bank S N Paul and former MD of SREI Securities Dinesh Jain.

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